Management and Organisational Behaviour

7th Edition

CHAPTER 19

Human Resource Management

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
 OHT 19.2

Human resource management

• An essential part of the process of

management is that proper attention be given
to the efficient use of resources, in particular
human resources

• The efficiency & performance of staff & their

commitment to organisational objectives are
fostered by good human relationships at work

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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The significance of HR

As the basis of her ‘living strategy’ Gratton proposes –

• There are fundamental differences between people as

an asset & the traditional assets of finance or
technology
• An understanding of fundamental differences creates a
new way of thinking & working in organisations: a shift
in mind-set
• Business strategies can only be realised through people
• Creating a strategic approach to people necessitates a
strong dialogue across the organisation

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
 OHT 19.4

Human resource management

or personnel management?

• The discussion generally centres on the extent to which

HRM is a new & distinctive philosophy with a particular
paradigm shift towards a more strategic approach to
people management

or

• New wine in old bottles – HRM is no more than a

different term for what good personnel managers have
always been doing

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.5

Human Resource Management (HRM)

Involves all management decisions and practices

that directly affect or influence the people, or
human resources, who work for the organization

Fisher et al.

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Defining HRM

The design, implementation & maintenance of

strategies to manage people for optimum
business performance including the development
of policies & processes to support these
strategies

CIPD

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Defining HRM

Organisations that get the people thing right are

the organisations that are likely to be around in
the future

Delaney

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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A strategic approach

• The strategic use of human resources will help

managers to contribute to the release of true
value by the optimum use of people’s
competencies

• A strategic HR approach requires that the

needs & talents of employees become matched
with organisational goals

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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HRM policies & practices

The formulation of HRM policies &

implementation of personnel practices &
procedures should be based on underlying
philosophies of managing behaviour & employee
relationships

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.10

HRM policies & practices

In general terms HRM policies should embrace –

• The design of effective organisation structure

• Staffing the new structure with suitable people
• Defining work roles & relationships
• Securing optimum working arrangements

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Range of HRM policies & practices

• Human resource planning

• Recruitment, selection & induction
• Salary & wage administration
• Organisational design & patterns of work
• Education, training & development
• Employee relations
• Employee services, welfare and health & safety

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Ethical frameworks for judging personnel practices

• Basic right – to be consulted on all matters affecting

the individual at work
• Organisational justice – fairness in treatment, equality
of opportunity & equity
• Universalism – acknowledging respect for the
individual
• Community of purpose – recognition of how
organisational decision-making affects different groups
& stakeholders

Winstanley et al.

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.13 Figure 19.1
HRM – a shared responsibility

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Approach taken by M&S

• Every manager is a personnel manager

• Every director is a personnel director

• A strong, well-trained team of personnel staff

provide support, training, guidance & advice to
management at all levels

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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To deliver organisational excellence HRM needs to

become –

• A partner with senior & line managers in strategy

execution
• An expert in the way work is organised & executed to
ensure costs are reduced & quality is maintained
• A champion for employees, representing their concerns
to senior management
• An agent of continuous transformation

Ulrich

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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People management – impact on profits

2. Is critical to business performance

3. Companies where employees have high levels
of job satisfaction & commitment showed
improving financial performance
4. HR practices explained nearly one-fifth of the
variation between companies in productivity
and profitability

CIPD

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Benefits of training

Training can:
• Increase confidence, motivation, &
commitment of staff
• Provide recognition, enhanced responsibility,
& the possibility of increased pay & promotion
• Give a feeling of personal satisfaction &
achievement, & broaden opportunities for
career progression
• Help to improve the availability, quality & skills
of staff

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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A planned & systematic approach to training

• Clear commitment to training throughout all

levels of the organisation
• An objective assessment of training needs
• Staff themselves should feel a sense of
involvement
• A clear set of objectives & a defined policy for
training
• Planned training programmes

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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A planned & systematic approach to training

• Choice of the most appropriate methods of

training
• External courses & training opportunities
linked to the educational system
• Regard given to the training needs of those
groups who are not currently active in the
workforce
• An effective system of review & evaluation
• Evaluation related to objective, measurable
factors
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Areas of training
With the rapidly changing nature of the business
world and the need to maintain competitive
advantage, organisations need to ensure that staff
are fully trained in –

• Knowledge of their products/services

• Technical skills
• Human relations skills
• How to work with maximum effect

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Growth of e-learning
Learning via technology

• Offers opportunities to provide a standard message to

large numbers of geographically-dispersed people

• Provides minimum disruption to people’s working lives

& private lives

• Can reduce costs where large numbers of learners

are involved

• Can be more accessible than other forms of training

methodologies

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.22

Investors in People
• A standard for the training & development of people
within an organisation

• Launched in 1991 by the Department of Employment

• Seeks to reward organisations that achieve prescribed

standards

• Provides a framework for improving business

performance & competitiveness

• Standard held for 3 years after which organisation is

required to go through external assessment again

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Investors in People

The standard is based on the following principles:

3. Public commitment from the top to invest &

develop people to achieve business goals
4. Planning how individuals & teams will be
developed
5. Taking relevant action to meet training &
development needs
6. Evaluating the outcomes of training &
development
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.24 Figure 19.3

Overview of performance appraisal

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Benefits to appraisal

• Can identify individual’s strengths & areas of

development
• Can indicate how strengths can be utilised &
weaknesses overcome
• Can help reveal problems that may be
restricting progress
• Can develop a greater degree of consistency
through regular feedback
• Can provide information for HR planning
• Can improve communications
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Performance appraisal & psychological principles

People work / learn / achieve more when they are

given -

3. Adequate feedback as to their performance

4. Clear attainable goals
5. Involvement in the setting of tasks & goals

James

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Designing a successful appraisal system

Questions to be addressed

• Who should be appraised?

• Who should undertake the appraisal?

• At what frequency should appraisals be

undertaken?

• Should the appraisal system be open?

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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360 degree feedback

• An appraisal & feedback from different groups

within the work situation

• Includes feedback from peers, subordinates,

bosses & possibly internal & external
customers

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Upward appraisal feedback

• An upward review or appraisal system that

involves subordinates’ appraisal of managers

• This can help to judge managers’ ability

accept constructive criticism

• Requires an appropriate organisational culture

& open management

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.30

Employment relations

Concerned with the relationships between the

policies & practices of the organisation & its staff
& the behaviour of work groups

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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Influences on the employment relations policy

• The type, nature & size of the organisation
• Structure & methods of operation
• Nature of staff employed
• Arrangements for collective bargaining
• Structure & strength of trade unions
• Preference of the parties for freedom of action
from outside influences
• The philosophy of top management & their
attitudes

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.32 Figure 19.6

Employment relations & business performance

This material is taken from Employment Relations into the 21st Century: An IPD Position Paper and reproduced with the
permission of the publisher, the Chartered Institute of Personnel and Development, London, SW19 4UX, December 1997, p.5.
Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
OHT 19.33 Figure 19.7
Effective employment relations

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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International approaches of HRM

• Ethnocentric approach
• Polycentric approach
• Geocentric approach
• Regiocentric approach

Budhwar

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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10 ways to make HR effective

• Be the catalyst for making things happen

• Avoid being the corporate soft touch
• Understand the whole business
• Keep people-management systems simple
• Remember line managers manage people, not
HR

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005
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10 ways to make HR effective

• Work with, not above, line managers

• Be super-efficient in the transactional stuff
• Be leaders in the transformational stuff
• Help the business to manage change
• Accept that good ‘people ideas’ exist outside HR

Browning

Mullins: Management and Organisational Behaviour, 7th edition © Pearson Education Limited 2005